Article is explained in three parts, which are as follows:-
1. CBDT Vs. The Supreme Court
2. What if the Due Date is a public holiday or Sunday
3. Calculation of Due Date: Day to be included/excluded
a) Every year the assessees, tax professionals and the tax departments play the game of ‘Due-Dates, Due Dates’. It has become a game of cricket in which the match is not decided until the last ball is bowled. For reasons attributable to all the stakeholders like tax professionals including assessees and the tax department, the due date of the compliance is rarely honored. Representations are regularly made to the tax department for extension of the immediate-upcoming ‘due-date’. The department does consider such representation initially but later on when further representations are received, the department keeps a tight mouth until it is just 1 day before the due date, whether it would extend the due dates or not. Under such cases when reply from the department does not seem to be forthcoming in the immediate future, that stakeholders take refuge in the temple of judiciary and the judiciary may, in its own discretion choose to intervene or not. The bone of contention is, the tax professionals feel enough number of days are not being given by the department for meeting the compliance particularly when the tax-utilities provided by the department undergo frequent modifications and as such sometimes the days available for compliance is not more than even 7 days whereas the Delhi High Court has ruled that the minimum time available to the assessees should be 180 days.
b) Under the Income Tax Act 1961, many dues dates fell due from 31st March 2020 till 31st December 2020. The GOI took a very lenient view of the predicament faced by the assesses and was kind enough to extend these due dates from time to time to different dates in the future. The first of such due date to fall due is on 31st December 2020 on which date returns of all non-audit assesses have to be uploaded and the various audit reports like under section 44AB, tax Audit Report, audit report u/s 12A(b) for the trust etc. The consequences for not uploading these audit reports are levy of heavy penalty and, in case of trusts, denial of the total exemption available u/s 11.
c) Taking Cognizance for the pandemic the Hon’ble Supreme Court took Suo moto cognizance of the situation arising from difficulties that might be faced by the litigants across the country in filing petitions/ applications/ suits/ appeals/all other proceedings within the period of limitation prescribed under the general law of limitation or under any special laws (both Central or State). By an order dated 27.03.2020 this Court extended the period of limitation prescribed under the general law or special laws whether compoundable or not with effect from 15.03.2020 till further orders.
d) The GOI vide Notification No. 93/2020 31st December, 2020 (as amended) amended the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 to provide the following due dates:
|S.N.||Type of Compliance||Due Date|
|1||Filing of ROI Non-Audit Case||10th January 2021|
|2||Filing of Audit Reports||15th January 2021|
|3||Filing of ROI -Audit Case||15th February 2021|
|4||Filing of any appeal, reply etc.||31st March 2021|
|5||Completion assessment proceeding etc.||30th April 2021|
e) Section 3(1)(b) of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 provides that 31st March 2021 shall be the due date for filing of any appeal, reply or application or furnishing of any report, document, return or statement or such other record, by whatever name called, under the provisions of the Income Tax Act 1961
f) As stated above in para (3) above, the SC had issued order dated 27-03-2020 by which the Court took Suo motu cognizance of the situation arising from difficulties faced by the litigants across the country in filing petitions/ applications/ suits/ appeals/all other proceedings within the period of limitation prescribed under the general law of limitation or under any special laws (both Central or State) extended the period of limitation prescribed under the general law or special laws whether compoundable or not with effect from 15.03.2020 till further orders.
g) Now, by an order dated 8th March 2021 the SC reviewed its order dated 27-03-2020 and further observed as under:
“Though, we have not seen the end of the pandemic, there is considerable improvement. The lockdown has been lifted and the country is returning to normalcy. Almost all the Courts and Tribunals are functioning either physically or by virtual mode. We are of the opinion that the order dated 15.03.2020 has served its purpose and in view of the changing scenario relating to the pandemic, the extension of limitation should come to an end. We have considered the suggestions of the learned Attorney General for India regarding the future course of action. We deem it appropriate to issue the following directions: –
1. In computing the period of limitation for any suit, appeal, application or proceeding, the period from 15.03.2020 till 14.03.2021 shall stand excluded. Consequently, the balance period of limitation remaining as on 15.03.2020, if any, shall become available with effect from 15.03.2021.
2. In cases where the limitation would have expired during the period between 15.03.2020 till 14.03.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 15.03.2021. In the event the actual balance period of limitation remaining, with effect from 15.03.2021, is greater than 90 days, that longer period shall apply.
The above conditions can be considered by the following example:
h) Now compare the due dates as permitted by the SC with the due date of 31st March 2021 as provided by Section 3(1)(b) of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020.
Both the due dates as prescribed by the Act and by the SC are different. Which one to follow? Naturally, the dates as per the order of the Supreme Court.
A question that often arises is as to what would happen if any due date falls on a public holiday or Sunday? Will the due date shift to the next working day of remain static particularly in view of the technological advancement made wherein all the processes are fully automated and the department’s computer system works 24 X 7, including on a public holiday or Sunday? The question assumes more significance because-:
10th January 2021, the last date of filing of ROI u/s 139(1), fell on Sunday. In such a case what should have been the due date ROI u/s 139(1)? 10th January 2021 or 11th January 2021?
General Clauses Act 1977: Computation of time. Section 10 provides that: –
Where, by any Act made after the commencement of this Act, any act or proceeding is directed or allowed to be done or taken in any Court or office on a certain day or within a prescribed period, then, if the Court or office is closed on that day or the last day of the prescribed period, the act or proceeding shall be considered as done or taken in due time if it is done or taken on the next day afterwards on which the Court or office is open :
Provided that nothing in this section shall apply to any act or proceeding to which the Limitation Act, applies
The Limitation Act, 1963: Section 4. Expiry of prescribed period when court is closed.
Section 4 provides that where the prescribed period for any suit, appeal or application expires on a day when the court is closed, the suit, appeal or application may be instituted, preferred or made on the day when the court re-opens.
Explanation. –A court shall be deemed to be closed on any day within the meaning of this section if during any part of its normal working hours it remains closed on that day.
It means that if any due date falls on say, Sunday on which day the Income Tax Office is closed, then the due date shall be the next working day on which the Income Tax Office is open.
Under the present circumstances where ROI are filed online, the day, Saturday, Sunday etc. hardly matters because the Income Tax Office is open and accepts returns 24 X 7.
The issue that comes up for discussion is whether the GOI, by providing 24 X 7, for online filing of ROI, can be said to be open on Sunday? If the answer is YES, then the last date would remain the same even if it be a Sunday. However, if the answer is NO then, the last day would shift to the next day on which the office is open.
The issue was brought to the knowledge of the department and the department issued a clarification as under:
Clarification regarding furnishing of returns under direct tax laws–Closed holiday—Regarding
Representations have been received by the Board seeking clarifications as to whether the assessee could file a return of income/loss under the Income-tax Act, 1961, on the next working day following a holiday and claim it to have been filed within the statutory time limit.
2. The matter has been examined in consultation with the Ministry of Law and the Board are advised that, in such cases, section 10 of the General Clauses Act, 1897, will be applicable. According to this section, where any act or proceeding is directed or allowed to be done or taken in any court or office on a certain day or within a prescribed period, then, if the court or office is closed on that day or the last day of the prescribed period, the act or proceeding shall be considered as done or taken in due time if it is done or taken on the next day afterwards on which the court or office is open.
3. In view of the above, it is hereby clarified that where the last day for filing return of income/loss is a day on which the office is closed, the assessee can file the return on the next day afterwards on which the office is open and, in such cases, the return will be considered to have been filed within the specified time limit.
4. This clarification also applies to the returns under other direct tax enactments.
It is very important here to note that the Explanation to Section 4 of The Limitation Act, 1963 provides
–A court shall be deemed to be closed on any day within the meaning of this section if during any part of its normal working hours it remains closed on that day.
It means that if the office is closed for even 2 hours on Sunday, it shall not be treated that the office is OPEN on Sunday and therefore this Sunday itself would not be the last date.
Whether the Income Tax Office is kept open on Sunday under e-filing system?
The answer is that only the CPC office at Bengaluru is open 24 X 7(Including Sunday). But it can’t be said that the Income Tax Office at Mumbai is open too. If one goes to the Income Tax Office on Sunday, he would find the office to be locked and therefore, not open. Under such circumstances it can be assumed that 10th January 2021, Sunday is not a working day for Income Tax Office Mumbai and therefore, the next working day, Monday would be the last date. We can find support for this contention from one FAQ on the official efiling website of the department.
Frequently Asked Questions (FAQs) issued by ITDCPC 06-08-2012
FAQ- 9. The last date of filing falls on Saturday or Sunday. Can I file my e-return on subsequent Monday?
It is worthwhile to note here that the question that is asked is if one can file “E- Return” and not a physical return. Therefore, this clarification will apply equally to 10th January 2021, being a Sunday.
Now the due date as per the order of the Supreme Court dated 8th March 2021 will be 90 days from 15-03-21 i.e. 13-06-2021. Incidentally, the extended due date which falls due on 13-06-2021 is a SUNDAY and therefore the next working day i.e. 14-06-2021 will be the date by which the necessary compliances must be completed.
Sometimes problems are faced in calculating the exact due date for any action or compliance required to be done. This is caused by the use of the words like “30 days from the order” or “2 months from the order”, with provisions for condolence of delay of 30 days or 1 month. Moreover, whether the date of receipt of the order and the date of filing of the appeal should be considered in the period of limitation or excluded or one included and another excluded.
For Example: Consider the following events:
|S.N.||Event||Date of the Event|
|1||Date of the Order||08-07-2019|
|2||Order dispatched by office of AC (By Speed Post)||29-08-2019|
|3||Order received by the party||30-08-2019|
|4||Appeal to be filed (within 3 months) (As per Department)||30-11-2019 (Saturday)|
|5||Appeal dispatched by the Party (By Speed Post)||02-12-2019 (Monday)|
|6||Appeal received by the department||04-12-2019|
|7||Application for condonation of delay dispatched by the party (By Speed Post)||05-12-2019|
|8||Application for condonation of delay received by the department||09-12-2019|
The department contended that petitioner had received the order on 30.08.2019. Petitioner had the normal period of limitation for filing the appeal upto 30.10.2019. This period could be extended by another month if delay could be satisfactorily explained. Adding this one month, the limitation period would stand extended to 30.11.2019. However, the present appeal was filed on 04.12.2019 i.e., the date of receipt of the appeal, which was beyond the extended period of limitation. The appeal was found to be time-barred. Consequently, the application for condonation of delay was rejected. Resultantly, the appeal was dismissed as time barred without entering into the merit.
However, the petitioner contended that section 9 of the General Clauses Act provides that in any Central Act or Regulation it shall be sufficient, for the purpose of excluding the first in a series of days or any other period of time, to use the word ‘from’, and, for the purpose of including the last in a series of days or any other period of time, to use the word ‘to’ and therefore the appeal dispatched on 02-12-2019 was within the time limitation, because 01-12-2019 was Sunday.
The matter related to levy of service tax, filing of appeal is governed by section 85 of the Finance Act, 1994, as amended. Section 85 provided that an appeal shall be presented within two months from the date of receipt of the decision or order of the adjudicating authority. As per the proviso, Commissioner of Central Excise (Appeals) may allow such appeal to be presented within a further period of one month if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the prescribed period of two months.
From the above it is noticeable that the word ‘presented’ is used and not ‘filed’. In other words, the appeal is to be presented and not filed. Thus, presentation of appeal has to be within two months from the date of receipt of the order or decision appealed against.
However, under the Central Excise Act, 1944 an appeal can be filed within 60 days from the date of communication of such decision or order. As per the proviso, the appellate authority may allow presentation of such appeal within a further period of 30 days if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal.
As per sub-section (35) of section 3 of the General Clauses Act, the word ‘month’ has been defined to mean a month reckoned according to the British calendar. It does not mean 30 days. In response to a question as to what was meant by the word ‘month’, Supreme Court held that British calendar would mean Gregorian calendar. It was held that when the period prescribed is a calendar month running from any arbitrary date, the period of one month would expire upon the day in the succeeding month corresponding to the date upon which the period starts.
The Supreme Court once again, in the year 2010, clarified that a month does not refer to a period of 30 days but refers to the actual period of a calendar month. It was clarified that if the month is April, June, September or November, the period comprising the month will be 30 days; if the month is January, March, May, July, August, October or December, the month will comprise of 31 days; but if the month is February, the period will be 29 days or 28 days depending upon whether it is a leap year or not. After referring to section 3(35) of the General Clauses Act, it was held that the general rule is that the period ends on the corresponding date in the appropriate subsequent month irrespective of some months being longer than the rest. Therefore, it was held that when the period prescribed is three months (as contrasted from 90 days) from a specific date, the said period would expire in the third month on the date corresponding to the date upon which the period starts. As a result, depending on the months, it may mean 90 days or 91 days or 92 days or 89 days.
Finance Act 1994 Section 85 (3A) provides that
“An appeal shall be presented within two months from the date of receipt of the decision or order of such adjudicating authority, made on and after the Finance Bill, 2012 receives the assent of the President, relating to service tax, interest or penalty under this Chapter:
Provided that the Commissioner of Central Excise (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of two months, allow it to be presented within a further period of one month”.
In so far, the word ‘from’ appearing in subsection (3A) is concerned, it appears from the language used that the period of limitation is to be counted from the date of receipt of the decision or order.
In this connection, section 9 of the General Clauses Act is quite instructive and the same is extracted hereunder: –
“9. Commencement and termination of time.- (1) In any Central Act or Regulation made after the commencement of this Act, it shall be sufficient, for the purpose of excluding the first in a series of days or any other period of time, to use the word ‘from’, and, for the purpose of including the last in a series of days or any other period of time, to use the word ‘to’.
(2) This section applies also to all Central Acts made after the third day of January, 1868, and to all Regulations made on or after the fourteenth day of January, 1887.”
Therefore, when the word ‘from’ is used, the first day in a series of days or any other period of time is to be excluded. But when the word ‘to’ is used, the last day in a series of days or any other period is to be included. Thus, section 9 of the General Clauses Act statutorily recognizes that while computing the time period, the first date is to be excluded when the word ‘from’ is used and to include the last date when the word ‘to’ is used.
The Supreme Court, in (2000) 8 SCC 649, explained the principle and held that when a period is delimited by statute or rule which has both a beginning and an end, and the word ‘from’ is used indicating the beginning, the opening day is to be excluded and if the last day is to be included the word ‘to’ is to be used. It was held thus: –
“In order to apply Section 9, the first condition to be fulfilled is whether a prescribed period is fixed “from” a particular point. When the period is marked by terminus a quo and terminus ad quem, the canon of interpretation envisaged in Section 9 of the General Clauses Act, 1897 require to exclude the first day.”
At this stage it may be noted that in sub-section (3A) of section 85, while the word ‘from’ is used to indicate commencement of the limitation period, the word ‘to’ is conspicuous by its absence to indicate capping of the limitation period. Moreover, if the appeal is sent by registered post to the appellate authority at the correct address within the period of limitation but was received beyond the period of limitation, that would not render it barred by limitation. This principle will apply where it is found that the appeal had been dispatched to the appellate authority prior to the expiry of the period of limitation.
The Petitioner received the Order by speed post on 30.08.2019 and therefore, this date would have to be excluded while counting the limitation period of two months which would then commence from 31.08.2019. Moreover, as discussed above, while construing the word ‘month’, it would mean a month as reckoned according to the British calendar, number of days in a month being immaterial. Therefore, the two months’ limitation period was available to the petitioner upto 31.10.2019. If we add the extended period of limitation of further one month, it would mean that delay could be condoned till 31.11.2019 because the total period of three months had commenced from 31.08.2019 and would be available till 31.11.2019 but because there is no 31 days in November, the extended period of limitation would spill over to 01.12.2019. This is more so because the word ‘to’ is not used in section 85(3A) to cap the limitation period on 30.11.2019. Therefore, the appeal was required to have been dispatched by 01.12.2019. But it was dispatched on 02.12.2019.
At this stage, it will be very useful to refer to section 10 of the General Clauses Act. Section 10 reads as under: –
“10. Computation of time.- (1) Where, by any Central Act or Regulation made after the commencement of this Act, any act or proceeding is directed or allowed to be done or taken in any Court or office on a certain day or within a prescribed period, then, if the Court or office is closed on that day or the last day of the prescribed period, the act or proceeding shall be considered as done or taken in due time if it is done or taken on the next day afterwards on which the Court or office is open:
Provided that nothing in this section shall apply to any act or proceeding to which the Indian Limitation Act, 1877 applies.
(2) This section applies also to all Central Acts and Regulations made on or after the fourteenth day of January, 1887.”
The object of this provision was succinctly explained by the Supreme Court AIR 1957 SC 271 wherein it was held that the object of this section is to enable a person to do what he could have done on a holiday, on the next working day. Where, therefore, a period is prescribed for the performance of an act in a court or office, and that period expires on a holiday, then according to this section the act should be considered to have been done within that period, if it is done on the next day on which the court or office is open. For section 10 to apply the requirement is that there should be a period prescribed and that period should expire on a holiday. Section 10 itself indicates that this provision is for computation of time. Therefore, if the limitation for filing an appeal or the extended period for filing an appeal expires on Sunday but it is filed on Monday, then by operation of section 10 it would be deemed to have been done within time.
Therefore, in the final analysis, it is stated that, 01.12.2019 was a Sunday. Therefore, benefit of this public holiday would be available to the petitioner in terms of section 10 of the General Clauses Act. Accordingly, the appeal presented on 02.12.2019 would be construed to be within the extended period of limitation, 01.12.2019 being a public holiday.
Now the million-dollar question: What about the late fees recovered, if any, by the department from those who filed their return on Monday i.e. 11th January 2021, if not waived in the return itself? Should it not be refunded?
Disclaimer: This article has been prepared purely for the academic purposes and it reflects the personal views of the author himself only. Every reader is cautioned to take expert professional advice before acting on this article. The author owes no responsibility of any kind to anyone who is guided by this article in his personal or professional activities, for which the reader himself only shall be liable.